Legal Insights for Foreign Investors in Bali: Navigating Property Ownership and Compliance

DENPASAR, NusaBali.com - An interactive Business Breakfast discussion titled "The Property & Land Development: Insights and Secrets of Bali Market from Top Experts" was hosted by Quantum Synergy Club in collaboration with BPR Lestari in Denpasar on Wednesday, November 16, 2024.

The event brought together legal practitioners and industry leaders to discuss the opportunities and challenges foreign investors face in Bali's property market.

Esther Hariandja, a legal expert from EHP Law Firm, emphasized the critical need for foreign investors to fully understand Indonesia's legal requirements before purchasing property. According to Esther, while foreigners can buy property in Indonesia, there are specific conditions they must fulfill to avoid legal complications down the road.

Esther outlined that foreign nationals can own property in Indonesia under certain terms and conditions, such as possessing a valid residence permit. "Foreigners need a Temporary Stay Permit (KITAS), which is issued by the Ministry of Law and Human Rights and must be renewed every two years," she explained. 

The legal expert also noted that foreigners must have the necessary immigration documents, including passports, visas, or stay permits.

Regarding property ownership rights, Esther stated that "The right of use (hak pakai) for residential properties is valid for 30 years and can be extended for an additional 20 years. After the extension period, the right of use can be renewed for another 30 years." These regulations, she added, are based on the Minister of Agrarian Affairs and Spatial Planning/Head of the National Land Agency Decree No. 1241/SK-HK.02/IX/2022, which stipulates the minimum purchase price for residential properties that foreigners can acquire, varying by region.

When it comes to land ownership, the limitations for foreign nationals are more stringent. "Purchasing land is more restricted for foreigners and is generally only feasible through the right to cultivate (hak guna usaha) or lease agreements," Esther noted.

She stressed the importance of ensuring the legal compliance of all documents related to property transactions. "A lack of understanding of legal requirements often leads investors to encounter problems that eventually end up in court, becoming 'trash cases' that only fill up the court's docket," she cautioned.

To mitigate these issues, Esther recommends mediation as the first step in resolving disputes, carefully addressing each problem individually.

Highlighting a recurring issue, Esther shared that many long-term investments often face challenges due to complications arising from third-party relationships. "It's ironic that years of investment can come to an end simply because of disputes with third parties," she remarked.

The interactive discussion featured notable attendees, including Niniek Mariani, Head of Lending Division; Olivia Isvansonny, Head of Funding Division; Irene Tang, Executive Director of Quantum Synergy Club; Alex Maltabar, Founder of VQ Coaching Academy; Erick Gonzales, Owner of Empathy School Ubud; and Gil Petersil, a global real estate entrepreneur. Their participation added valuable insights and perspectives, enriching the conversation on the complexities and strategies for property investment in Bali.

The event highlighted the necessity for foreign investors to approach the Bali property market with a comprehensive understanding of local regulations and legal requirements, ensuring a smooth and legally sound investment process.